Country-by-Country-Reporting in Italy: an example of information to be communicated to the parent company

Companies and permanent establishments belonging to foreign multinational groups resident in Italy, must provide quantitative data and other information necessary for parent companies to complete the Country-by-Country Report.

The Ministerial Decree of 23 February 2017 published last March, sets out the operating methods for the submission of the Country-by-Country Report (CbCr) to the Revenue Agency. These instructions are based on the requirements of the OECD’s Report Action 13: Guidance on the Implementation of Transfer Pricing Documentation and Country-by-CountryThis report recommended a standardized approach on three levels to each country for the preparation of the documents related to Transfer Pricing and CbCr (”three-tiered standardized approach”):-a Master File containing standardized information relevant for all multinational group members;-a Local File referring specifically to material transactions of the local taxpayer;-a CbCr containing certain information relating to the global allocation of the MNE’s income and taxes paid together with certain indicators of the location of economic activity within the multinational group.The Provision defining the technical instructions for the submission of the CbCr was issued last 28 November; however, companies residing in Italy must have already completed a first mandatory fulfilment in the Tax Return (Form SC 2017, whose presentation expired on 31 October 2017), by "notifying" to the Revenue Agency, what subject of the multinational group was required to submit the CbCr.Additionally, as several European and non-European countries have already adapted their local regulations regarding the documentation required by BEPS Action 13, companies and permanent establishments that belong to foreign multinational groups but reside in Italy, must provide data and information to the "group head", to allow the completion of the CbCr.The following chart is an example of the sheet drawn up for a group of companies residing in Italy and owned by a foreign company belonging to a multinational group subject to the CbCr.